State Attorney General Bob Ferguson has filed a lawsuit against 19 chicken producers, accusing them of being involved in a decade-long illegal conspiracy to inflate and manipulate prices, rig bids and coordinate supply reductions to maximize profits.
The 19 companies named in Ferguson’s lawsuit account for approximately 95% of all chicken produced for meat, from chicken breasts people purchase at the grocery store to the nuggets they buy at fast food restaurants, according to the recently filed lawsuit.
An estimated 90% of Washington consumers — about 7 million Washingtonians as well as the state’s hospitals, colleges and nursing homes — buy products derived from the chickens these companies produce, according to the suit.
“If you’ve eaten chicken in the last decade, this conspiracy touched your wallet,” Ferguson said in statement. “This conspiracy cost middle-class and low-income Washington families more money to put food on their table. I will hold these companies accountable for the profits they illegally made off the backs of hardworking Washington families.”
The lawsuit, filed Tuesday in King County Superior Court, accuses the companies of illegally engaging in a variety of anticompetitive conduct to coordinate supply, as well as manipulate pricing since at least 2008. Ferguson said this conduct violates the Washington Consumer Protection Act and Washington antitrust laws.
In the suit, Ferguson alleges that the companies coordinated to exercise what they termed as “discipline” to reduce supply and increase prices starting in early 2008.
As a result, chicken prices rose through mid- to late 2008 and remained near all-time highs in 2009, despite the country at large falling into a recession.
As prices rose, production increases followed in 2010, which in turn began to depress prices again, the suit claims. This prompted the companies to coordinate a second round of production cuts in 2011, Ferguson asserts, which led chicken prices to recover. In addition, the companies also culled their breeder flocks, which, coupled with lower supply, increased chicken prices — and the companies’ profits — for the coming years, the suit alleges.
The companies named in the lawsuit are:
- Tyson Foods Inc.
- Pilgrim’s Pride Corp.
- Sanderson Farms Inc.
- Perdue Farms Inc.
- Koch Foods Inc.
- Foster Farms LLC
- Mountaire Farms Inc.
- Wayne Farms LLC
- Amick Farms LLC
- George’s Inc.
- Peco Foods Inc.
- House of Raeford Inc.
- Fieldale Farms Corp.
- Case Foods Inc.
- Mar-Jac Poultry
- Claxton Poultry Farms
- Simmons Foods Inc.
- O.K. Foods Inc.
- Harrison Poultry Inc.
Also named in the suit is Agri Stats, a company that collects and publishes industry data. The suit accuses the company, which claims to provide data anonymously, knowingly presented the companies’ data in a way that made them easy to identify, facilitating an illegal exchange of sensitive business information.
Though there are several class-action lawsuits nationwide related to the industry that have been settled, Washington consumers and institutional purchasers are not included in these settlements and were ineligible to receive funds from them, according to a statement from the Attorney General’s Office.
Ferguson is seeking restitution for Washington consumers and businesses who he claims overpaid for chicken by millions of dollars. The companies also face millions in civil penalties over their violations.